Note: Retail Change & Society – success or failure of different forms of retailing varies by country & society e.g Hypermarkets began in Belgium 1961, spread through Europe late 60’s early 70’s (single storey 2500m ² food & non-food) Warehouse Clubs – started in US 1976 – 3,500 – 4,000 items (food, elec, car accs) costs kept low, GM 10%, membership fee = 80% trading profit. Costco to UK 1993
Theories have been developed to describe & explain the expansion & contraction of different forms of retailing 4 th group grounded in maths – chaos & catastrophe theory – progressive, relatively continuous, changes can suddenly have a violently discontinuous phase with rapid & severe change
The idea of all the cyclical theories is that CHANGE FOLLOWS A SEQUENCE OF STAGES. In some cases the sequence repeats itself with each ‘cycle’ of change. THE WHEEL model (Hollander 1960) uses the hypothesis that retail change results from the innovative behaviour of individuals. Conforming examples are UK supermarkets, limited line discount stores, department stores, mail order houses. BUT small specialists and fashion boutiques don’t fit the model Loss of energy and entrepreneurial spirit tend to bring about the next ‘turn of the wheel’ E.g.’s of drift Retailer personalitites Trade up re growing customer affluence Preference for non-price competition (add services, differentiate) Belief that higher gross margins = higher net profits
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